Guide to buying property in France

In France the purchase of a property is a regulated process. Once a price has been agreed with the vendor both parties will sign a preliminary contract, usually a Compromis de Vente and make a deposit of normally 10% of the purchase price (except in the case of new constructions where this deposit will be around 5%).

The estate agent or French solicitor, notaire, will hold these funds and the contract is binding for both vendor and purchaser, although there is a seven day cooling off period (rétraction or réflexion) from the date of signing the contract.

If you intend to raise finance for the purchase this sales agreement must have a conditional clause (clause suspensive) which is a subject to a clause confirming that you will be seeking a mortgage. If the mortgage is subsequently declined you will not forfeit your deposit.

Completion usually takes place at a notaire's office about 2-3 months after signing the contract. The parties must appear in person or be represented by an attorney. The completion money should by then be in the notaire's bank account and both vendor and purchaser will sign the deed of sale (Acte de Vente), the definitive contract equivalent to the deeds of the property.

Once you have found a suitable property, you will negotiate and enter into an initial agreement with the vendor. French law does not recognise the concept of subject to contract and therefore an offer to purchase a property should not be made unless you are absolutely certain that you wish to purchase. You should consider before the offer is made all the conditions that you wish to include in the contract. The estate agent is usually responsible for negotiating between the parties to ensure that the contract is accepted by both parties. A role normally undertaken by a solicitor in the UK.

Compromis de Vente

A common type of preliminary sale agreement for a property purchase is called a Compromis de Vente and is a binding contract between the buyer and the seller, which sets out the terms and price of the sale. Let-out clauses (Clauses Suspensives) can be inserted into the contract making the purchase subject to certain conditions. Usual clauses are:

The purchaser cannot obtain a mortgage or property loan - Exclusion by the French Land Commission (SAFER) - An unsatisfactory Certificat d'Urbanism, assessment of planning status of the property - Promess de Vente - Another type of preliminary sale agreement is the Promesse de Vente which is similar to the Compromis de Vente except that there are no let-out clauses (Clauses Suspensive). With this contract the seller agrees to sell the property by a certain date, for a certain price and according to set conditions. This is the most common type of agreement in France, and the main advantage to a buyer is that the seller cannot withdraw their acceptance of your offer if all of the conditions in the agreement are met. The disadvantage to you as the buyer is that if you decide to withdraw you will lose your deposit.

The Deposit

The initial contract is normally prepared by the estate agent or by a notaire for larger transactions and is often available for signature within several days of a sale being agreed with the vendor. A 10% deposit (around 5% for new properties under construction) is normally paid to either the agent or notaire and held in an escrow account and not passed to the vendor. The deposit will be forfeited if you withdraw from the purchase for any conditions not covered by the contract and you may be sued for non-completion.

Cooling Off Period

You generally have seven days after the signing of the contract to withdraw from the purchase, without penalty. This seven day 'cooling off' period includes week-ends and Bank Holidays so it is extremely important that you fully understand the implications of signing this document. It's a good idea to consult with a firm of solicitors, experienced in the language and law of France, before signing any documentation.

Searches

Once the initial contract has been signed the property is taken off the market and there follows a period of generally 6-8 weeks in which the searches are carried out to ensure that the property is not subject to any imminent environmental changes. During this time the purchaser will be required to resolve the financing of the purchase. These searches and the other contractual matters are carried out by the notaire.

For property sales involving more than 1Ha (2.471 acres) of land, the notaire is obliged to inform the S.A.F.E.R. (Societe d'Amenagement Foncier et d'Etablissement Rural). This is a governmental body with the right of pre-emption over the sale. They are more concerned with large tracts of agricultural land and rarely intervene with private sales. If pre-emption occurs the compromis is deemed null and void and all deposit moneys are returned.